A residential project has a contract value of $185,000. The contractor's preliminary notice was not properly served. Under NC lien law, what is the maximum lien amount the contractor can claim?
Correct Answer
A) $1,800
Without proper preliminary notice on residential projects, contractors are limited to claiming a maximum lien of $1,800 regardless of contract value.
Why This Is the Correct Answer
NC lien law (G.S. § 44A) imposes a $1,800 cap on lien claims by contractors on residential projects when the required preliminary notice was not properly served on the owner. This severe limitation is a legislative protection for homeowners, ensuring they know upfront who is working on their property and who might file a lien.
Why the Other Options Are Wrong
Option B: $18,500
$18,500 represents 10% of the contract value — a logical-seeming fraction, but NC law does not use a percentage-based cap. The $1,800 limit is a flat statutory cap, not tied to contract value.
Option C: $185,000
$185,000 (full contract value) would only be recoverable if preliminary notice was properly served and all lien requirements were met. Failure to serve preliminary notice removes this option.
Option D: $0
$0 would apply if the lien was completely barred, but NC law doesn't fully extinguish the right — it caps it at $1,800. A total $0 claim is the result in some other states for failure to provide preliminary notice.
Memory Technique
Think '$1,800 penalty for the paperwork blunder.' Preliminary notice protects the homeowner. Skip it, and NC slaps you with an $1,800 ceiling no matter how big the project. '$1,800' — remember it as a firm number, not a percentage.
More North Carolina Questions
A residential contractor in NC wants to bid on a $125,000 project but currently holds an Intermediate license. What action must be taken?
A contractor discovers contaminated soil during excavation on a commercial project in Charlotte. Under NC environmental regulations, what is the first required action?
A North Carolina contractor completes a $45,000 residential addition project. The homeowner refuses to pay the final $8,000. What is the filing deadline for a mechanic's lien under NC lien law?
A residential contractor in Charlotte is building a deck addition. Which inspection is typically required first under NC building codes?
A contractor performs work on a residential property in North Carolina but is not paid. The work was completed on March 15th, and the last material was delivered on March 20th. What is the deadline to file a claim of lien?
A subcontractor performing electrical work discovers that the general contractor's license has been suspended. What action should the subcontractor take according to NC General Statutes?
A contractor in North Carolina discovers contaminated soil during excavation. The soil contains petroleum products above reportable levels. Which agency must be notified immediately?
A contractor performing work on a North Carolina highway project encounters a suspected archaeological artifact. What is the required action under NC environmental regulations?
Calculate the workers' compensation premium for a NC roofing contractor with $250,000 in annual payroll and a rate of $18.50 per $100 of payroll:
Calculate the lien amount a subcontractor can claim on a $180,000 project where they provided $35,000 in materials and labor, but the general contractor still owes them $12,000:
People Also Study
Business & Financial Management
120 questions · 70% to pass
Contract Administration
60 questions · 70% to pass
Project Management
60 questions · 70% to pass
Related Study Resources
Previous Question
What is the continuing education requirement for North Carolina licensed contractors for each license renewal period?
Next Question
A specialty contractor in North Carolina wants to install a 750 kW emergency generator system. The total contract value is $425,000. What license classification is required?